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31 January 2018
Corbin Man Found Guilty of Devising Murder-for-Hire SchemeRead the Press Release
LONDON, Ky. — William Timothy Sutton, 55, of Corbin, Ky., has been convicted of four counts of interstate murder-for-hire and one count of possession of firearms by a convicted felon. The verdict came yesterday, following six days of trial, which included testimony from all four intended victims of the scheme. The jury deliberated for less than two hours in reaching its verdict.
The evidence at trial established that, in March of 2017, while incarcerated in the Whitley County Detention Center, Sutton offered to pay a fellow inmate forty thousand dollars ($40,000) to murder the Whitley County Attorney, the Whitley/McCreary County Commonwealth’s Attorney, and two ex-girlfriends. The evidence further established that Sutton mailed a letter to a relative from jail, asking the relative to provide the would-be hitman with one of Sutton’s own firearms to further the scheme. Law enforcement became aware of the plan, interceded, and ultimately arrested Sutton.
“The despicable conduct in this case not only victimized four individuals, but was a brazen attack upon the judicial process and the rule of law,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Protecting the public from violence and ensuring the integrity of our system of justice are core principles of the Department of Justice and central priorities of our Office. In our efforts to make our community safer, we will continue to confront and prosecute criminal conduct that undermines these principles. I want to commend the work of our valued law enforcement partners, whose efforts made this prosecution possible.”
Sutton is scheduled to be sentenced on May 30, 2018. He faces up to ten years on each offense. However, any sentence would be imposed only after the Court has considered the U.S. Sentencing Guidelines and the applicable statutes.
US Attorney Duncan; Stuart Lowrey, Special Agent In-Charge, ATF; and Commissioner Rick Sanders of the Kentucky State Police, jointly announced the jury’s verdict.
The ATF and the Kentucky State Police conducted the investigation preceding the indictment. Assistant United States Attorney W. Samuel Dotson represented the United States.
Connecticut Man Sentenced for Federal Firearms OffensesRead the Press Release
BOSTON – An Enfield, Conn., man was sentenced today in federal court in Springfield for unlawfully possessing firearms.
Kenneth Finch Jr., 31, was sentenced by U.S. District Court Judge Mark G. Mastroianni to five years in prison and three years of supervised release. In September 2017, Finch Jr. pleaded guilty to two counts of being a convicted felon in possession of a firearm. Finch has a prior felony conviction in North Carolina for being a felon in possession of a firearm.
In June 2015, law enforcement received information that Finch was a source for illegal firearms in the Springfield area. On June 3, 2015, Finch sold a Ruger Model P-90 .45 caliber pistol and six rounds of .45 caliber ammunition to two undercover officers in exchange for $1,200. Finch was later arrested on May 12, 2016, and charged. The following day, Finch called his girlfriend from jail and directed her to a firearm that he had concealed in her apartment. Law enforcement later recovered a Duetsche Werke 7.65 mm caliber pistol from Finch’s girlfriend at her apartment in Springfield. On Nov. 10, 2016, Finch was charged in a superseding indictment with an additional count of being a felon in possession of a firearm.
United States Attorney Andrew E. Lelling and Mickey D. Leadingham, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms & Explosives, Boston Field Division, made the announcement today. Assistant U.S. Attorney Katharine A. Wagner of Lelling’s Springfield Branch Office prosecuted the case.
Company Owners Plead Guilty to $13.8 Million 'Rent-A-Vet' SchemeRead the Press Release
KANSAS CITY, Mo. – Timothy A. Garrison, United States Attorney for the Western District of Missouri, announced today that former owners of a local construction company, Patriot Company, Inc., have pleaded guilty in federal court to their roles in a “rent-a-vet” scheme to fraudulently obtain more than $13.8 million in federal contracts.
Jeffrey K. Wilson, 53, of the Village of Loch Lloyd in Belton, Mo., pleaded guilty today before U.S. District judge Howard F. Sachs to one count of government program fraud. Paul R. Salavitch, 57, of Kansas City, Mo., pleaded guilty on Tuesday, Jan. 30, 2018, to a misdemeanor charge of making a false writing.
Wilson, who is not a veteran, managed the day-to-day operations and the long-term decision making of Patriot Company from May 2005 to January 2014. Salavitch is a service-disabled veteran who falsely certified that he was involved in the day-to-day operations of Patriot Company. Salavitch’s purported active management qualified Patriot Company to obtain set-aside contracts to which it was not entitled.
Wilson admitted he used Salavitch’s veteran and service-disabled veteran status in a “rent-a-vet” scheme to obtain 20 government contracts for which Patriot Company received more than $13.8 million. As a result of the fraud scheme, legitimate veteran-owned-and-run businesses were not awarded these contracts.
Wilson’s plea agreement cites 20 contracts with the U.S. Department of Veterans Affairs and the U.S. Army, totaling $13,819,522, which were fraudulently obtained by Wilson, Salavitch and Patriot Company. The contracts, which ranged as high as $4.3 million, included construction projects in Missouri, South Dakota, Texas, Nebraska Oklahoma, Michigan, Indiana, Tennessee, Iowa, Illinois and North Dakota.
In September 2013, the Veterans Administration conducted an unannounced site visit of Patriot Company. The site inspector discovered that Salavitch was working 40 miles away at his full-time job as a federal employee with the Department of Defense in Leavenworth, Kan. In November 2013, Salavitch falsely certified to the Missouri Division of Purchasing and Materials Management that Patriot Company was a legitimate service-disabled veteran-owned small business when he knew it was not because he did not actively run the company. In December 2013, the Veterans Administration de-certified Patriot Company.
Under the terms of today’s plea agreement, Wilson is subject to a sentence of up to 18 months in federal prison without parole. Salavitch is subject to a sentence of up to one year in federal prison without parole. Wilson and Salavitch must also consent to the federal civil forfeiture of approximately $2.1 million. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorneys Jane Pansing Brown, Stacey Perkins Rock and Curt Bohling. It was investigated by the Department of Veterans Affairs – Office of Inspector General – Criminal Investigation Division and the General Services Administration – Office of Inspector General.
Cohoes Woman Sentenced for Social Security FraudRead the Press Release
ALBANY, NEW YORK – Donna M. Smith, age 58, of Cohoes, New York, was sentenced today to 14 months in prison, to be followed by 3 years of supervised release, for fraudulently obtaining disability insurance benefits.
The announcement was made by United States Attorney Grant. C. Jaquith and John F. Grasso, Special Agent in Charge of the Social Security Administration (SSA) Office of the Inspector General, New York Field Office.
As part of her October 19, 2017 guilty plea, Smith admitted to submitting two false statements in which she claimed to have not worked between 2006 and 2015, when in fact she had worked for a total of eight Capital Region employers during this time. Disability insurance benefits are designed to replace, in part, the loss of income due to a disability.
Senior United States District Judge Lawrence E. Kahn also ordered Smith to pay $108,866.20 in restitution to the SSA.
This case was investigated by the SSA Office of the Inspector General and prosecuted by Special Assistant United States Attorney Jason White.
Clearwater Property Manager Pleads Guilty to Equity Skimming and Bankruptcy Fraud ChargesRead the Press Release
Tampa, Florida – United States Attorney Maria Chapa Lopez announces that Michael Rubino (59, Clearwater) today pleaded guilty to a criminal information charging him with one count of equity skimming and one count of bankruptcy fraud. He faces a maximum penalty of five years in federal prison for each count. A sentencing date has not yet been set.
According to the plea agreement, Rubino devised a scheme to defraud mortgage lenders holding recorded mortgage notes, as well as the Federal National Mortgage Association (“Fannie Mae”) and the Federal Housing Agency (“FHA”), which guaranteed the mortgage notes. In furtherance of his scheme, Rubino searched the Pinellas County Clerk of Court records to find properties in various stages of foreclosure. He then contacted distressed homeowners who had already defaulted on their mortgages and vacated their properties. Rubino offered to take control of, manage, and rent the properties to new tenants. Rubino told the homeowners that he would use the rental income he obtained to pay the mortgages and, in some instances, pay the homeowner a portion of the rent he collected. At no time did Rubino hold any legal or equitable interest in these properties, or have authorization from the mortgage lenders, Fannie Mae, or FHA, to rent out the properties. Further, he failed to remit any of the collected rent monies to FHA, as required by law.
Additionally, in order to prevent Fannie Mae and the mortgage lenders from lawfully foreclosing on properties secured by mortgage notes, Rubino engaged in a bankruptcy fraud scheme whereby he filed fraudulent bankruptcy petitions in the names of the distressed homeowners, without their knowledge or consent, just prior to the scheduled foreclosure sale. These fraudulent bankruptcies invoked the automatic stay provision of the bankruptcy code, preventing the mortgage note holders from conducting the foreclosure sale. The fraudulent bankruptcy petitions filed by Rubino allowed him to continue to collect rent monies to which he was not entitled.
This case was investigated by the U.S. Department of Housing and Urban Development - Office of Inspector General and the Federal Housing Finance Agency – Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Chris Poor.
Canadian Man Suspected of Transporting Drugs Across the Border Arrested on Marijuana ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Alexander Maizels, 48, of Ontario, Canada, was arrested and charged by criminal complaint with conspiracy to possess with intent to distribute 100 kilograms or more of marijuana. The charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years and a $5,000,000.
Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that according to the complaint, a federal investigation was initiated by Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) Buffalo Border Enforcement Security Team (BEST) into the activities of the defendant and multiple co-conspirators contracted to transport controlled substances between the United States and Canada for transnational criminal organization.
The investigation was based in part on Maizels’ arrest in April 2015 by the Illinois State Police for being in possession of over 100 kilograms of marijuana. On April 7, 2015, the defendant entered the United States at the Buffalo, NY port of entry operating a commercial tractor trailer. On April 8, 2015, Maizels’ made a delivery in Patterson, NJ. Later that day, the defendant arrived in Liverpool, NY, at a warehouse that had been identified by law enforcement officers as a warehouse utilized by individuals based in Canada who were suspected of transporting controlled substances. On April 9, 2015, the defendant traveled to a business in Elk Grove Village, IL. HSI Buffalo provided information to HSI Chicago and the Illinois State Police. The Illinois State Police searched the tractor trailer and found 30 brown boxes which contained 235 heat-sealed bundles of a green leafy substance suspected to be marijuana. The Illinois State Police estimated the street value of the seized marijuana was more than $900,000.
The complaint is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and Customs and Border Protection, under the direction of Director of Field Operations Rose Brophy.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
California Woman Sentenced for Importing Methamphetamine and HeroinRead the Press Release
LAREDO, Texas – A 42-year-old woman has been ordered to federal prison following her conviction of conspiracy to import methamphetamine and heroin, announced U.S. Attorney Ryan K. Patrick. Aurelia Rufino-Pilar pleaded guilty Sept. 5, 2017.
Today, U.S. District Court Judge Diana Saldaña ordered her to serve a total of 108 months in prison. She is a legal permanent resident, but could face deportation proceedings following her term of imprisonment.
On April 21, 2017, Rufino-Pilar arrived at the Lincoln-Juarez Bridge port of entry in Laredo in a taxi and applied for admission to the United States. At primary inspection, she stated she had luggage and some bags in the taxi. She claimed they were not hers and was just taking them to San Antonio for a friend.
She further stated that she was a legal permanent resident who had traveled from her home in Bakersfield, California, to Nuevo Laredo, Tamaulipas, Mexico, and had stayed there two hours to receive treatment for psoriasis. She said she was going to take her friend’s luggage to San Antonio and then return to her home in California.
The taxi was referred to secondary inspection where agents discovered eight tubs of mole inside four duffle bags. The officers opened one tub and found a cylindrical object from which a sample was taken and tested positive for methamphetamine. A sample from another cylinder tested positive for heroin. In total, authorities discovered a total of 36.18 kilograms of liquid methamphetamine and 4.14 kilograms of heroin.
Rufino-Pilar ultimately admitted that the purpose of her trip was to transport narcotics to San Antonio and to seek treatment for her skin condition. She planned to take a bus to San Antonio to deliver the narcotics.
She has been in custody where she will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Customs and Border Protection and Immigration and Customs Enforcement’s Homeland Security Investigations conducted the investigation. Assistant U.S. Attorney Michael Bukiewicz is prosecuting the case.
California Man Sentenced on Methamphetamine ChargeRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Lawrence Neubert, 46, of Spring Valley, CA, who was convicted of conspiracy to possess with intent to distribute, and to distribute, 50 grams or more of methamphetamine, was sentenced to 120 months in prison by Senior U.S. District Judge William M. Skretny.
Assistant U.S. Attorney Laura A. Higgins, who handled the case, stated that on September 4, 2014, and October 2, 2014, the defendant shipped packages, containing more than 220 grams of methamphetamine, from California to Buffalo. Surveillance video from September 4, 2014, showed Neubert preparing the package and paying for its shipment in cash. In exchange for sending the packages, Neubert received $3500 in USPS money orders.
The plea is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division.
Calais Woman Sentenced to Two Months for Stealing Social Security BenefitsRead the Press Release
Bangor, Maine: United States Attorney Halsey B. Frank announced that Amy Lynn Holmes, 46, of Calais, Maine was sentenced yesterday in U.S District Court by Judge John A. Woodcock, Jr. to two months in prison and three years of supervised release for stealing over $96,000 in Supplemental Security Income (SSI) benefits. SSI benefits are paid to people with limited income who are blind, disabled or elderly. Holmes was also ordered to pay $33,821 in restitution. She pleaded guilty on August 29, 2017.
Court records reveal that between February 2004 and May 2016, Holmes falsely represented to the Social Security Administration (SSA) that she was living alone and not receiving help or money from any person. In fact, she was living with her husband who was providing her with financial assistance, Florida vacations and vehicles. She told investigators that she knew that she would have been ineligible for SSI if she had disclosed her husband’s income and that they were living together.
“This is a good example of the ongoing efforts by the Federal government to deter fraud against social security programs,” said U.S. Attorney Frank. "The U.S. Attorney’s Office is committed to prosecuting those in Maine who engage in government benefit fraud. We hope that this prosecution and others like it will discourage people who are tempted to steal government benefits.”
The case was investigated by the SSA, Office of the Inspector General.
CEO of Mortgage Lender Charged with Making False Statements to HUDRead the Press Release
John Seckel, of Newtown, Pennsylvania, was charged by information with four counts of making false statements to the Department of Housing and Urban Development. Seckel had been the CEO of Seckel Capital, LLC, an FHA-approved mortgage lender in Bucks County, Pennsylvania.
For the years 2012 to 2015, Seckel Capital, LLC, was a mortgage lender in Bucks County that was approved by the Federal Housing Administration to originate mortgage loans that would be insured by the FHA. John Seckel maintained the status of Seckel Capital as an FHA-approved lender during this time period by making false statements to the Department of Housing and Urban Development. In particular, on four occasions from 2013 to 2016, Seckel filed audited financial statements for Seckel Capital that Seckel had forged. Seckel also, four times, filed certifications falsely claiming that he had met the net worth and other requirements to be approved as an FHA lender.
If convicted the defendant faces a maximum statutory sentence of eight years’ imprisonment.
The case was investigated by the United States Department of Housing and Urban Development, Office of Inspector General, and is being prosecuted by Assistant United States Attorney Laurie Magid.
An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.
Buffalo Man Indicted on Heroin and Fentanyl ChargesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that a federal grand jury returned an indictment charging Jawayne Watkins, 29, of Buffalo, NY, with possession with intent to distribute, and distribution of, heroin, and possession with intent to distribute, and distribution of a mixture of heroin and fentanyl. The charge carries a maximum sentence of 20 years in prison and a fine of $1,000,000.
Assistant U.S. Attorney Michael J. Adler, who is handling the case, stated that according to the indictment and a previously filed complaint, in July 2017, an undercover officer made a $1,500 controlled purchase of heroin from the defendant. On November 9, 2017, the defendant made a second sale, this time a mixture of heroin and fentanyl.
Watkins was on New York State parole and living in a halfway house at the time of his arrest in November 2017. The defendant will be arraigned on the indictment before U.S. Magistrate Judge Jeremiah J. McCarthy on February 2, 2018, at 2:30 p.m.
The indictment is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent-in-Charge Kevin Kelly, and the Erie County Sheriff’s Department, under the direction of Sheriff Timothy Howard.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Brooklyn-Based Home Health Care Service and Its President Agree to Pay over $6.4 Million to Settle False Claims Act Suit Alleging Improper Billing PracticesRead the Press Release
Home Family Care, Inc. (HFC), a Brooklyn-based company that provides home health care services, and Alexander Kiselev, the co-owner and President of HFC, have entered into a civil settlement agreement under which they have agreed to pay $6,415,000 to resolve allegations that they violated the federal and state False Claims Acts by falsely billing Medicaid for home health care services that HFC did not provide to Medicaid recipients. HFC’s former Vice President, Michael Gurevich, entered into a separate settlement regarding the same allegations. The settlement agreements were approved by United States District Judge Sterling Johnson, Jr.
Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the settlements.
“When health care providers seek and receive Medicaid funds for services that they never provided, they jeopardize the fiscal integrity of a critical health care program,” stated United States Attorney Donoghue. “We will hold health care providers accountable for their violations of federal law.” Mr. Donoghue thanked the Medicaid Fraud Control Unit of the Office of the New York State Attorney General, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the New York Office of Field Operations and the Office of Associate Chief Counsel (New York) of U.S. Customs and Border Protection for their assistance in the investigation.
An investigation revealed that, from the time HFC began operating in or about 2008 until at least May 2014, HFC engaged in a fraudulent scheme to enrich itself at the expense of Medicaid by knowingly and systematically billing for home health aide and personal care aid services that were not in fact provided to Medicaid recipients. To carry out this scheme, HFC directed its employees to deliberately circumvent its own system for verifying the attendance of aides at the homes of Medicaid recipients for whom the aides were allegedly providing care and to deliberately circumvent HFC’s internal controls that purported to ensure that aides were present in the recipients’ homes.
The allegations were brought to the government’s attention through the filing of a complaint pursuant to the qui tam provisions of the False Claims Act. Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery.
The United States’ case is being handled by Assistant United States Attorney Elliot M. Schachner of the Office’s Civil Division.
E.D.N.Y. Docket No. 10-CV-2490 (SJ)
Bronx Man Admits Transporting Multiple Kilograms of Heroin as Part of A Cross-Country Drug Distribution ConspiracyRead the Press Release
TRENTON, N.J. – A Bronx, New York, man who was arrested in Warren County on Christmas Eve in 2014 while transporting 15 kilograms of heroin pleaded guilty today in Trenton federal court, U.S. Attorney Craig Carpenito announced.
Vionel Rondon Cortorreal, 29, pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to distribute heroin.
According to documents filed in this case and statements made in court:
In December 2014, Rondon Cortorreal engaged in a conspiracy with members of a drug trafficking organization to transport and distribute kilogram quantities of heroin. On Dec. 24, 2014, Rondon Cortorreal was arrested after law enforcement seized 15 kilograms of heroin from a hidden compartment in the vehicle that he and another conspirator, Dany Francisco-Valerio, 44, of Bronx, were operating.
The narcotics charge to which Rondon Cortorreal pleaded guilty carries a maximum penalty of life in prison and a $10 million fine. Sentencing is scheduled for May 30, 2018.
Francisco-Valerio previously pleaded guilty to the same charge before Judge Sheridan on Oct. 26, 2017 and awaits sentencing.
U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Valerie Nickerson in Newark, and officers of the N.J. State Police, under the direction of Acting Superintendent Col. Patrick J. Callahan, with the investigation leading to today’s guilty plea.
Defense counsel: Brian J. Neary Esq., Hackensack, New Jersey
Bradenton Man Sentenced to Fifteen Years in Prison for Being A Felon in Possession of A FirearmRead the Press Release
Tampa, Florida – U.S. District Judge Charlene Honeywell today sentenced Daniel R. Kendricks (46, Bradenton) to 15 years in federal prison for possessing a firearm as a convicted felon. The Court also ordered him to forfeit the firearm used in the offense. Kendricks was found guilty after a bench trial on October 31, 2017.
According to court documents, on October 17, 2016, deputies from the Manatee County Sheriff’s Office were searching a residence and discovered Kendricks sleeping on a couch in a garage. When deputies searched the garage, they discovered a loaded gun on a table next to the couch where Kendricks had been sleeping. Kendricks subsequently confessed to possessing the gun.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms, and Explosives. It was prosecuted by Assistant United States Attorney Callan L. Albritton.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. In October 2017, Attorney General Jeff Sessions announced the reinvigoration of PSN and directed all U.S. Attorneys’ Offices to develop districtwide crime reduction strategies, incorporating the lessons learned since the program’s inception in 2001. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
Boston-Area Investment Advisers Charged with FraudRead the Press Release
BOSTON – Two Boston-area investment advisors were charged today in federal court in Boston with using their clients’ funds to make their own investments and to pay personal expenses.
James Polese, 51, of Wenham, and Cornelius Peterson, 28, of Newton, were each charged with one count of conspiracy and investment adviser fraud and thee counts of bank fraud. Polese was also charged with an additional five counts of bank fraud and one count of aggravated identity theft. Both men have agree to plead guilty.
As alleged in court documents, from approximately 2014 to June 2017, Polese and Peterson misappropriated approximately half a million dollars from their clients by transferring funds out of their clients’ accounts without their knowledge or consent. Specifically, On Aug. 20, 2014, Polese and Peterson used $100,000 from a client’s account to invest in a wind farm project although it was not an investment opportunity authorized by their company. On May 15, 2015, Polese and Peterson used $400,000 from another client’s account to back a letter of credit in support of the wind farm project. On multiple occasions in 2017, Polese caused funds to be transfered from a client’s account to pay personal expenses, including college tuition payments and credit card bills. Polese and Peterson were both terminated from the company in June 2017.
The charges of conspiracy and investment adviser fraud each provide for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,00 or twice the gross gain or loss, whichever is greater. The charge of bank fraud provides for a sentence of no greater than 30 years in prison, five years of supervised release and a fine of $250,00 or twice the gross gain or loss, whichever is greater. The charge of aggravated identity theft provides for a mandatory consecutive term of two years in prison. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement today. The U.S. Securities & Exchange Commission also provided valuable assistance with the investigation. Assistant U.S. Attorney Sara Miron Bloom of Lelling’s Economic Crimes Unit is prosecuting the case.
The details contained in the charging document are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.
Attorney General Sessions Announces DEA Surge to Combat Prescription Drug DiversionRead the Press Release
Attorney General Jeff Sessions announced yesterday that, over the next 45 days, the Drug Enforcement Administration (DEA) will surge Special Agents, Diversion Investigators, and Intelligence Research Specialists to focus on pharmacies and prescribers who are dispensing unusual or disproportionate amounts of drugs. To intensify the fight against prescription drug diversion, DEA will utilize data from approximately 80 million transaction reports it collects every year from prescription drug manufacturers and distributors. DEA will aggregate and analyze this data, which includes distribution figures and inventory of prescription drugs, to identify patterns, trends, and statistical outliers that can be developed into targeting packages.
“Our country is in the midst of a drug abuse crisis, enabled and worsened by rampant drug trafficking and prescription drug diversion,” said Attorney General Jeff Sessions. “This surge of resources by the Drug Enforcement Administration will help us make more arrests, secure more convictions, and reduce the number of diverted or unnecessary prescription drugs causing addiction and overdose.”
The surge announced yesterday is the latest in a series of efforts by the Department of Justice to turn the tide of the opioid epidemic and reduce the inevitable violent crime that accompanies widespread drug trafficking. In August, the Department announced a new data analytics program, the Opioid Fraud and Abuse Detection Unit, which uses data to identify and prosecute individuals who are contributing to the opioid epidemic. The Department has also assigned experienced prosecutors to opioid hot spot districts to focus solely on investigating and prosecuting opioid-related health care fraud, and the DEA has reorganized its field divisions for the first time in nearly 20 years to increase its effectiveness nationwide.
Read Attorney General Sessions’ complete remarks here.Attorney General Issues National Slavery and Human Trafficking Prevention Month ProclamationRead the Press Release
Attorney General Jeff Sessions issued the following proclamation commemorating January as National Slavery and Human Trafficking Prevention Month:
“Human trafficking is a nationwide public health and civil rights crisis. Its victims are everywhere: at truck stops, in cities, in rural areas, and in suburbs, and who now total an unconscionable 25 million victims globally according to some estimates. That means 25 million human beings—parents, siblings, and children—have been coerced into a commercial sex act, forced into labor, or exploited because they desperately seek a better life. It is a priority of the Department of Justice to combat this depraved and predatory behavior through swift and aggressive enforcement of our nation’s laws to bring traffickers to justice and restore the lives of victims and survivors.
“The Justice Department’s U.S. Attorneys’ Offices, working closely with the Federal Bureau of Investigation (FBI), other federal agencies, and our state, local, and tribal partners, are on the front lines, leading our shared fight against human trafficking in all its forms. These entities are supported by the Department’s Civil Rights Division which is home to a team of dedicated investigators and prosecutors—the Human Trafficking Prosecution Unit (the HTPU)—tasked with bringing human traffickers to justice and vindicating the rights of their victims. Additionally, the Department’s Criminal Division includes the Child Exploitation and Obscenity Section (CEOS), which is committed to harnessing expertise in attacking the technological and systemic challenges that are involved in the sexual exploitation of minors, as well as other specialized prosecution teams who bring expertise in organized crime and money laundering.
“Our efforts have produced high-impact prosecutions to dismantle transnational organized human trafficking enterprises, have launched interagency anti-trafficking initiatives with unprecedented momentum, and have vindicated the rights and freedoms of countless victims and survivors.
“These efforts resulted in the conviction of nearly 500 defendants in trafficking cases in fiscal year 2017, and making $47 million available to help trafficking survivors. Last fall, the FBI—along with state and local task forces and international law enforcement partners—recovered 84 minors and arrested 120 traffickers, as part a single week-long operation. However, we are keenly aware that many challenges lie ahead and we are committed to taking our efforts to the next level.
“In his Presidential Proclamation, President Trump asked us to ‘recommit ourselves to eradicating the evil of enslavement’ and to ‘pledge to do all in our power to end the horrific practice of human trafficking.’ In the spirit of the President’s request, the Justice Department is hosting a Human Trafficking Summit in Washington, D.C. on February 2, 2018, two days before Super Bowl LII. The Super Bowl provides an opportunity to raise awareness of the surge in commercial sex activity around major sporting events, and of our commitment to finding and protecting sex trafficking victims who are at risk of being compelled, coerced, or exploited as minors in that context.
“The Human Trafficking Summit will be led by Associate Attorney General Rachel Brand and will convene law enforcement, victim support organizations, and the business community to focus on enhancing the strong partnerships behind all successful anti-trafficking efforts and identifying opportunities to increase collaboration and coordination as we take on new challenges.
“There is no room in a civilized society for those who choose to violate an individual’s rights and freedoms by subjecting them to any form of human trafficking. To those that still make that choice: make no mistake, the Justice Department will use every lawful tool to uncover your illegal activity and bring you to justice.”
Aspiring Rapper Sentenced to More Than 15 Years in Federal Prison for Illegally Possessing a Gun While Filming a Music VideoRead the Press Release
CHICAGO — An aspiring rapper from Chicago has been sentenced to more than 15 years in federal prison for illegally possessing a handgun while filming a music video.
RICARDO BURGOS, 31, possessed the gun in January 2016 while filming the rap music video in a north suburban hotel room. Burgos, who performs under the name “Nation,” can be seen in the video holding two firearms while rapping about selling drugs, committing acts of violence, and disrespecting law enforcement. Burgos had previously been convicted of multiple felonies and was not legally allowed to possess a firearm.
Burgos pleaded guilty to one count of illegal possession of a firearm by a felon, and one count of distribution of a controlled substance. U.S. District Judge Ronald A. Guzman on Tuesday imposed a 188-month prison sentence.
The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jeffrey S. Sallet, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation; and Eddie T. Johnson, Superintendent of the Chicago Police Department.
Burgos admitted in a plea declaration that he possessed a .45-caliber semi-automatic pistol while filming the video in a hotel room in Deerfield. Shortly thereafter, Burgos brought the gun to the Austin neighborhood on the West Side of Chicago, where Chicago Police officers arrested him.
Law enforcement subsequently determined that the .45-caliber pistol had been stolen from a store in Indiana. The gun was also used in a shooting in Chicago two days before the music video was filmed.
The drug charge arose from multiple illegal narcotic sales by Burgos in 2015. Burgos sold 4 grams of crack cocaine and 1.4 grams of heroin to several individuals, all of whom were undercover police officers.
The government is represented by Assistant U.S. Attorney Jordan M. Matthews.
Arizona Man Sentenced for Drug TraffickingRead the Press Release
United States Attorney Trent Shores announced today that Chief United States District Judge Gregory Frizzell sentenced Francisco de Jesus Bojorquez Para, 33, of Phoenix, Arizona, to serve 170 months in federal prison for Distribution of Methamphetamine and Possession With Intent to Distribute Methamphetamine.
Bojorquez Para was a multiple-pound distributor of methamphetamine in the Tulsa area. On April 3, 2017, federal agents arrested Bojorquez Para with several pounds of pure methamphetamine, commonly known as “Ice”, over $10,000.00 in cash, digital scales and several cell phones. When agents arrested Bojorquez Para, he also had a distribution amount of heroin in his possession.
“This prosecution was the result of a concerted and relentless campaign to target sources of supply responsible for bringing methamphetamine, heroin and other controlled substances into the Northern District of Oklahoma,” said United States Attorney Shores.
This prosecution was part of Operation “Pine Tar Posse”, an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation. The prosecution resulted from a joint investigation conducted by the Drug Enforcement Administration, Broken Arrow Police Department, Tulsa Police Department and Oklahoma Bureau of Narcotics. Assistant United States Attorney Joel-lyn A. McCormick handled the prosecution of this case.
Alien Smugglers Sentenced after Rollover Incident that Led to DeathRead the Press Release
LAREDO, Texas – Two Laredo residents and a Nuevo Laredo man have been sentenced to federal prison for harboring and transporting illegal aliens which resulted in multiple deaths, announced U.S. Attorney Ryan K. Patrick. Four aliens died and another four received severe injuries resulting from a vehicle rollover.
Christina Rosalinda Washington, 31, of Laredo, pleaded guilty Nov. 10, 2016, while Gerardo Lucero-Martinez, 46, also of Laredo, and Raul Arreola-Marron, 50, an undocumented alien from Mexico living in Laredo, pleaded guilty Aug. 23, 2016.
Today, U.S. District Judge Diana Saldaña ordered Washington, Arreola-Marron and Lucero-Martinez to serve 70, 126 and 71 months, respectively. Arreola-Marron had been on federal supervised release at the time of the offense and was further ordered to serve an additional six months. Washington and Lucero-Martinez will serve five-year-terms of supervised release following their sentences, while Arreola-Marron, not a U.S. citizen, is expected to face deportation proceedings following his release. In handing down the sentences, Judge Saldaña noted that each compounded the tragedy and added to the suffering of the aliens by not calling 911 immediately to report the accident so that medical personnel could attend to the injured.
At the time of their pleas, the three admitted to conspiring to harbor eight aliens in Laredo and transporting them to Houston. Washington managed the aliens at her residence, while Arreola-Marron transported the aliens after their crossing from Mexico to Washington’s residence and provided all transport vehicles. Lucero-Martinez was engaged in transporting the aliens to Houston.
Near midnight on Feb. 17, 2016, near the intersection of Texas Highway 59 and Farm to Market Road 2895, Lucero-Martinez lost control of the pickup truck he was driving. The vehicle flipped and all occupants were thrown from the truck. He telephoned Arreola-Marron and Washington to report the accident and asked Arreola-Marron to come to the scene to pick him up. Lucero-Martinez thereafter telephoned another person to pick him up who drove him to a Laredo hospital. At no time did any of the three defendants attempt to provide or contact authorities to provide medical assistance to the aliens left at the scene. State, local and federal authorities arrived four hours later and provided emergency first aid to the four survivors.
The defendants have been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
Immigration and Customs Enforcement’s Homeland Security Investigations, Border Patrol, Texas Department of Public Safety and the Webb County District Attorney’s Office conducted the investigation. Assistant U.S. Attorney Homero Ramirez prosecuted the case.
Albuquerque Man Sentenced to Prison for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Leroy Gallegos, 58, of Albuquerque, N.M., was sentenced today in federal court to 60 months in prison for his conviction on a methamphetamine trafficking charge. Gallegos will be on supervised release for four years after completing his prison sentence.
Gallegos was arrested on Oct. 4, 2017, on a criminal complaint charging him with distribution of methamphetamine. According to the complaint, Gallegos sold approximately four ounces of methamphetamine to an undercover law enforcement agent on Aug. 31, 2017, in Bernalillo County, N.M.
Gallegos subsequently was indicted on Oct. 24, 2017, and was charged with distribution of more than 50 grams of methamphetamine. Gallegos pled guilty to the indictment on Nov. 1, 2017, without the benefit of a plea agreement.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and was prosecuted by Assistant U.S. Attorney Paul H. Spiers.
Akron man indicted after firing on three officers, attempting two carjackingsRead the Press Release
An Akron man was indicted in federal court on charges related to shooting at three law enforcement officers as well as attempting to carjack someone and possessing methamphetamine, law enforcement officials said.
Michael P. Johnson, 34, was charged with one count of assault on law enforcement officers with a deadly weapon, two counts of discharging a firearm during a crime of violence, one count of brandishing a firearm during a crime of violence, two counts of attempted carjacking and two counts of possession with intent to distribute methamphetamine.
“This defendant put dozens of people at risk – the officers he fired upon, the innocent people he tried to carjack and the Akron residents simply passing by,” U.S. Attorney Justin E. Herdman said. “This defendant’s violent actions must be answered for, and we are pleased that he is being brought to justice.”
Akron Police Chief Ken Ball said: “This incident is an example of the grave danger that the men and women of the Akron Police Department face every day in service to their community. We are pleased that the defendant will soon be made to answer for his behavior and will face a mandatory minimum of 65 years in prison for actions that could have cost innocent bystanders, and officers, their lives.”
Johnson fired a Smith and Wesson .38-caliber revolver at law enforcement officers engaged in the performance of their official duties on Jan. 2. He also fired a firearm in relation to his drug trafficking activity and possessed at least 50 grams of methamphetamine, according to the indictment.
On the same date, Johnson brandished the .38-caliber revolver while attempting to carjack a 2009 Kia Sportage. He also attempted to carjack a 2002 Toyota Camry, according to the indictment.
Prosecutors are seeking to forfeit the firearm as well as approximately $8,672 in cash seized as part of the investigation.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
This case is being prosecuted by Assistant U.S. Attorneys Aaron Howell and Henry F. DeBaggis following an investigation by the Akron Police Department, the U.S. Marshals and the Drug Enforcement Administration.
An indictment is only a charge and is not evidence of guilt. The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Air Force Thief Sentenced to Twenty-Three Months ImprisonmentRead the Press Release
Charles E. Peeler, United States Attorney for the Middle District of Georgia, announces that Mikel A. Parish, age 28, from Griffin, Georgia, was sentenced to twenty-three months in prison on January 30, 2018, for theft of government property. Sentencing was done by the Honorable Marc T. Treadwell, United States District Judge, in Macon, Georgia. There is no parole in the federal system.
Mr. Parish was also ordered to pay restitution in the amount of $208,024.57. Additionally, after his prison sentence, he will have three years of supervised release and a $100.00 mandatory assessment fee.
The evidence showed that between April, 2015 and March, 2016, Mr. Parish worked at the Defense Logistic Agency (DLA) on Robins Air Force Base (RAFB). DLA provides storage and distribution support to RAFB and distributes supplies worldwide to all branches of the military. Mr. Parish was a distribution process worker who was responsible for entering the data about those supplies into the ordering and cataloging systems for the RAFB. United States Air Force (USAF) Security Forces were contacted by the Griffin Police Department regarding Mr. Parish’s pawning and selling of what appeared to be military equipment. Military investigators confirmed that Mr. Parish was in fact pawning and selling military equipment. Further investigation revealed that Mr. Parish used his badge to access DLA before and after his normal work hours, whereby he would steal military equipment, including copper wire spools, rifle scopes and ballistic vests.
“In these times of reduced budgets and government austerity, prosecution of government theft and fraud is one of the priorities I have established for my office,” said United States Attorney Peeler. “Stealing from our armed forces even as they are engaged in violent conflict in defense of our nation is simply reprehensible. I commend the cooperation between the Griffin police and the RAFB investigators which uncovered Mr. Parish’s theft and brought him to justice.”
This case was investigated by United States Air Force 78 Security Forces Squadron Investigations Section. Assistant United States Attorney Kimberly S. Easterling prosecuted the case for the Government.
Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603 or [email protected].
30 January 2018
Worcester Man Charged with Marriage FraudRead the Press Release
BOSTON – A Worcester man was arrested yesterday in connection with entering into six fraudulent marriages in order to evade immigration laws.
Peter Hicks, 57, was charged in federal court with one count of marriage fraud. Hicks was released following an initial appearance in federal court in Worcester yesterday.
According to the criminal complaint unsealed yesterday, in 2014 federal law enforcement agents uncovered evidence that Hicks married six foreign national women from Sub-Saharan Africa between 2003 and 2013. Hicks allegedly filed for immigration benefits for four of his six wives.
During a routine interview as part of his application for benefits for a non-citizen spouse, Hicks admitted to marrying three of the women solely to obtain immigration benefits for them. During a second interview with immigration officials, Hicks admitted that he was paid to recruit people for fraudulent marriages. During an interview with federal agents on Jan. 8, 2015, Hicks admitted that he was involved in marriage fraud for approximately 13 years, and that he received payments to marry undocumented African women and to find willing United States citizens to marry illegal aliens for the purpose of allowing the women to establish legal status in the United States.
It is further alleged that on at least one occasion, Hicks was still married to one spouse at the time of his marriage to another spouse. Hicks also fraudulently claimed on an immigration form submitted on behalf of one of his spouses, that he had only one former spouse and that he had only petitioned for immigration benefits for the one former spouse, when, in fact, Hicks had actually been married five times and submitted requests for immigration benefits for a number of his former spouses.
The charge of marriage fraud provides for sentence of no greater than five years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston; and Denis C. Riordan, District Director, U.S. Citizenship and Immigration Services, District 1, made the announcement. Assistant U.S. Attorney David G. Tobin of Lelling’s Major Crimes Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Winchester Man Sentenced to 8.5 Years in Federal Prison for Conspiring to Distribute over a Kilogram of HeroinRead the Press Release
CONCORD, N.H. –Acting United States Attorney John J. Farley announced today that Ross Gould, 30, formerly of Winchester, New Hampshire was sentenced to 8.5 years in federal prison for participating in a heroin trafficking conspiracy.
Court documents and statements in court showed that beginning in 2011 and continuing through mid-March 2015, Gould distributed quantities of heroin throughout the Keene, New Hampshire, area. Investigators determined that Gould initially sold gram quantities of heroin, but later started selling larger quantities of heroin to individuals in Keene and the surrounding towns. From mid-2014 through Gould’s arrest in March of 2015, Gould’s drug trafficking increased substantially. He obtained approximately two kilograms of heroin every four or five weeks from a heroin source in Lawrence, Massachusetts. Gould used a drug courier to obtain the heroin from the source and transport the drugs back to the Keene area where the drugs were distributed by Gould and other drug couriers.
After the lengthy investigation, Gould was arrested in March, 2015. A search of Gould’s Winchester residence resulted in the seizure of approximately five grams of heroin, $11,000 cash and 14 firearms. A subsequent search of a safe that Gould kept at another residence resulted in the seizure of 1.7 kilograms of heroin, 392 grams of cocaine and a small quantity of miscellaneous pills.
Gould pleaded guilty to conspiring to distribute over one kilogram of heroin on October 5, 2017. Under the terms of the plea agreement, Gould consented to liquidate personal property purchased with drug proceeds that resulted in the forfeiture by the United States of approximately $ 28,000. Gould also forfeited to the United States 14 firearms that he purchased with drug proceeds. The United States previously forfeited the $11,000 cash seized from Gould’s residence.
Three of Gould’s drug couriers have been sentenced to federal prison as a result of their participation in this drug trafficking organization. Jamie Hilow, 29, formerly of Winchester, is serving an 11-year prison sentence. Hilow’s wife, Jaclyn Hilow, 31, also formerly of Winchester, is serving a 10-year prison sentence. Jason Daigle, 40, formerly of Nelson, is serving an eight-year prison sentence.
Two of Gould’s sources from Lawrence also have been convicted on drug trafficking charges. Jonathan Cruz-Marte, 34, was sentenced to 55 months in prison and Felix Portes, 56, was sentenced to 57 months in prison.
“The United States Attorney’s Office is committed to working with our local, state and federal law enforcement partners to target individuals who are distributing illegal drugs in New Hampshire,” said Acting U.S. Attorney Farley. “While those who suffer from addiction need access to treatment, those who seek to profit from the distribution of heroin and other deadly drugs will be prosecuted aggressively. I commend the work of the law enforcement officers who worked together during this long-term investigation to disrupt and dismantle a major drug trafficking organization that was responsible for the distribution of large quantities of heroin in the Keene area.”
The investigation was conducted by the: (1) Immigration and Customs Enforcement, Homeland Security Investigations; (2) New Hampshire Attorney General’s Drug Task Force; (3) Bureau of Alcohol, Tobacco, Firearms and Explosives; (4) New Hampshire State Police; (5) Keene, New Hampshire Police Department; (6) Richmond, New Hampshire Police Department; and (7) Salem, New Hampshire Police Department. Assistant United States Attorney Jennifer Cole Davis prosecuted the case.
This case was supported by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.
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Wheeling man admits to firearm, methamphetamine chargesRead the Press Release
WHEELING, WEST VIRGINIA - A Wheeling, West Virginia, man has admitted to firearm and drug charges, United States Attorney Bill Powell announced.
Peter Hankish, age 43, was indicted on one count of “Unlawful Possession of a Firearm” and one count of “Possession with Intent to Distribute Methamphetamine.” Hankish, having previously been convicted of Theft in the Camp Lejeune Marine Corps General Court, possessed a 7.62 caliber rifle. Hankish admitted to possessing methamphetamine. The crimes occurred in April 2017 in Ohio County.
Assistant U.S. Attorney Danae DeMasi-Lemon is prosecuting the case on behalf of the government. The Ohio Valley Drug & Violent Crime Task Force, a HIDTA-funded initiative, investigated.
Senior U.S. District Judge Frederick P. Stamp, Jr. presided.
Upshur County man admits to his role in a firearms conspiracyRead the Press Release
ELKINS, WEST VIRGINIA – An Ellamore, West Virginia man has admitted today to his role in a firearms theft and sale scheme, United States Attorney Bill Powell announced.
Johnny Lee Riley, age 28, pled guilty to one count of “Possession of Stolen Firearm.” Riley admitted to receiving, possessing, bartering, concealing, or selling 10 firearms in Upshur County in October 2016.
Riley faces up to 10 years incarceration and a fine of up to $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephen D. Warner is prosecuting the cases on behalf of the government. The Bureau of Alcohol, Firearms, Tobacco and Explosives, The Mountain Region Drug & Violent Crime Task Force, the Greater Harrison Drug &Violent Crime Task Force, a HIDTA-funded initiative, the West Virginia State Police, Upshur County Sheriff’s Office, Lewis County Sheriff’s Office, the Buckhannon Police Department, and the Weston Police Department investigated.
The investigation was funded by the federal Organized Crime Drug Enforcement Task Force Program (OCDETF). The OCDETF program supplies critical federal funding and coordination that allows federal and state agencies to work together to successfully identify, investigate, and prosecute major interstate and international drug trafficking organizations and other criminal enterprises.
U.S. Magistrate Judge Michael John Aloi presided.United States Attorney’s Office Supporting RAYSAC Opioid InitiativeRead the Press Release
Roanoke, VIRGINIA – United States Attorney Rick Mountcastle announced the Roanoke Area Youth Substance Abuse Coalition’s (RAYSAC) social media campaign beinthepicture.org, whose goal is to warn individuals between the ages of 12 and 25 about the dangers of prescription drug misuse, specifically opioid pain medication and heroin. The program, which began in December 2017, is featured on Facebook, Twitter, YouTube, Instagram and Snapchat, as well as in posters in various restaurants, shops, schools, libraries, the health department and other locations around the Roanoke Valley.
“Opioid pain killer and heroin addiction is a national crisis,” said United States Attorney Mountcastle. “Our community must work together to defeat the epidemic of addiction through access to treatment and recovery, prevention programs that raise awareness of the dangers of addiction, and targeted law enforcement.”
RAYSAC is recruiting young adults in the Roanoke Valley between the ages of 18-25 to serve on an advisory council. This council will provide guidance and expertise on the best ways to bring awareness to their peers about this critical issue.
U.S. Attorney’s Office for the Western District of Virginia Collects over $11 Million in Fiscal Year 2017Read the Press Release
Roanoke, VIRGINIA – United States Attorney Rick A. Mountcastle announced today that the United States Attorney’s Office for the Western District of Virginia collected $11,113,257 in criminal and civil actions in Fiscal Year 2017. More than $7,200,000 of this amount went to victims of crime. “Providing restitution to crime victims is a priority, and I commend the three members of our Financial Litigation Unit for their hard work during fiscal year 2017,” said United States Attorney Mountcastle.
The Western District of Virginia also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $73,387,907 in cases pursued jointly with these offices.
Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending September 30, 2017.
Additionally, the United States Attorney’s Office for the Western District of Virginia, working with partner agencies and divisions, also collected $4,115,494 in asset forfeiture actions in FY 2017. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
The United States Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
U.S. Attorney’s Office for the Eastern District of Tennessee Collects $11,041,603.14 in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2017Read the Press Release
KNOXVILLE, Tenn. - U.S. Attorney J. Douglas Overbey announced today that the Eastern District of Tennessee collected $11,041,603.14, in criminal and civil actions in Fiscal Year 2017. Of this amount, $9,282,250.34, was collected in criminal actions and $1,759,352.80, was collected in civil actions.
Additionally, the Eastern District of Tennessee worked with other U.S. Attorney’s offices and components of the Department of Justice to collect an additional $92,344,571.85, in cases pursued jointly with these offices. Of this amount, $8,310.00, was collected in criminal actions and $92,336,261.85, was collected in civil actions.
Overall, the Justice Department collected just over $15 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2017.
U.S. Attorney J. Douglas Overbey praised the hard work of the Assistant U.S. Attorneys and the Monetary Recovery Unit in his office stating, “The overall mission of the U.S. Attorney’s office involves not just protecting the public by prosecuting and locking up criminals, but also helping to restore victims to the fullest extent possible. Restitution, fines and assessments ordered by the U.S. District Court, when collected by our office, benefit all victims of crime. Collected restitution is paid directly to the victim(s) of the crime(s) for whom it was ordered, while collected fines and assessments are paid to the Crime Victims’ Fund to fund state victim compensation and assistance programs.”
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s office for the Eastern District of Tennessee, working with partner agencies and divisions, collected $4,512,735.00 in asset forfeiture actions in FY 2017. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
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Two Men Sentenced to Prison in International $200 Million Credit Card Fraud ConspiracyRead the Press Release
Last of 22 Defendants Convicted and Sentenced
TRENTON, N.J. – A New York man and a Middlesex County, New Jersey, man were sentenced to today to federal prison terms for their respective roles in one of the largest credit card fraud schemes ever charged by the Justice, U.S. Attorney Craig Carpenito announced.
Qaiser Khan, 53, of Valley Stream, New York, previously pleaded guilty to an information charging him with one count of conspiracy to commit bank fraud. He was sentenced today to six months in prison. Sat Verma, 65, of Iselin, New Jersey, previously pleaded guilty to an information charging him with one count of access device fraud. He was sentenced to one year in prison. U.S. District Judge Anne E. Thompson imposed both sentences today in Trenton federal court.
According to documents filed in this case and statements made in court:
Khan and Verma were originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. They are the last of 22 defendants to be sentenced in this scheme.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a phony credit profile with the major credit bureaus; pump up the credit of the false identity by providing bogus information about that identity’s creditworthiness; then borrow or spend as much as they could without repaying the debts. The scheme caused more than $200 million in confirmed losses to businesses and financial institutions.
The scope of the criminal fraud enterprise required the conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.
Khan admitted he helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. He also admitted they knew the cards would be used fraudulently at businesses. Verma admitted he effected transactions with access devices issued to another person.
In addition to the prison terms, Judge Thompson sentenced Qaiser to five years of supervised release and fined him $10,000. Verma was sentenced to three years of supervised release, ordered to forfeit $270,000 and fined $1,000.
U.S. Attorney Carpenito credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca, Newark Division, special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, and the U.S. Social Security Administration for their assistance.
The government is represented by Assistant U.S. Attorneys Zach Intrater and Daniel Shapiro of the U.S. Attorney’s Office Economic Crimes Unit, as well as Assistant U.S.
Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.This case was brought in coordination with the Financial Fraud Enforcement Task Force, which was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Khan: Christopher Adams Esq., Roseland, New Jersey
Verma: Jerard A. Gonzalez Esq., Hackensack, New JerseyThree Wood County defendants plead guilty for roles in federal heroin conspiracyRead the Press Release
CHARLESTON, W.Va. – Three Wood County defendants pleaded guilty today for their roles in a heroin conspiracy, announced United States Attorney Mike Stuart. Jonathan “Mohawk” Brown, 36, and Sir Pritis Williams, 28, both of Parkersburg, entered their guilty pleas to conspiracy to distribute 100 grams or more of heroin. Kennedy Michele Walker, 23, of Vienna, pleaded guilty to aiding and abetting the distribution of heroin. U.S. Attorney Stuart commended the collaborative investigative efforts of the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, the Parkersburg Drug Task Force, the West Virginia State Police, the Wood County Sheriff’s Department, and the Police Departments of the cities of Parkersburg, Vienna, and Williamstown.
Brown and Williams admitted their respective involvement with several other individuals in distributing heroin at various locations throughout the Parkersburg area. In addition, Brown and Williams admitted to selling heroin to a confidential informant working with the Parkersburg Drug Task Force and the FBI on numerous occasions between November 2016 and May 2017. Both men further admitted to distributing between 100 and 400 grams of heroin during the course of the conspiracy. Brown and Williams face at least five and up to 40 years in federal prison when they are sentenced on April 26, 2018.
Walker admitted that on March 20, 2017, she provided heroin to another individual, who then sold it to a confidential informant working with the Parkersburg Drug Task Force. The drug deal took place in the area of 17th and Briant Streets in Parkersburg. Walker faces up to 20 years in federal prison when she is sentenced on April 26, 2018.
Three codefendants involved in the same conspiracy, Joseph Reeder-Shaw, Bernard Spann, and Debra Martin, have previously pleaded guilty to conspiracy to distribute 100 grams or more of heroin, and face at least five and up to 40 years in federal prison. Reeder-Shaw and Spann are scheduled to be sentenced on April 19, 2018. Martin is scheduled to be sentenced on April 5, 2018.
Assistant United States Attorney John Frail is in charge of the prosecution. The plea hearings were held before United States District Judge Joseph R. Goodwin.
This drug conspiracy is being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.
- Follow us on Twitter: SDWVNews and USAttyStuart
Three Sentenced in Counterfeit Credit Card SchemeRead the Press Release
PITTSBURGH – Three residents of the State of Florida, have been sentenced in federal court on a charge of conspiracy to commit identity theft, United States Attorney Scott W. Brady announced today.
United States District Judge Cathy Bissoon sentenced Raul Perez, age 38, of Miami, FL, to 24 months imprisonment with credit for time served, three years supervised release and restitution in the amount of $14,992.96; Alexis Delgado, age 44, of Hialeah, FL, to 18 months imprisonment with credit for time served, three years supervised release, restitution in the amount of $14,992.96, and a $5,000 fine; and, Leyanis Menendez, age 38, also of 83 Hialeah, FL, to 18 months imprisonment with credit for time served, three years supervised release, restitution in the amount of $14,992.96, and a $5,000 fine.
According to the information presented to the court, Raul Perez, Alexis Delgado, Leyanis Menendez and others conspired to manufacture and traffic-in counterfeit credits cards throughout the United States, which were used to purchase merchandise at stores nationwide, including the outlet stores in Gove City and Washington, PA, in June 2015.
“Incidents of credit card skimming, have reached epidemic proportions and consumers need to be very vigilant about any suspicious or unauthorized activity on their accounts,” said Marlon V. Miller, special agent in charge HSI Philadelphia. “These types of crimes not only result in major losses for financial institutions and merchants, but can cause a major disruption in consumers’ personal finances. HSI will continue to work closely with its federal and local law enforcement partners to target skimming schemes and the criminal syndicates that are behind them.”
Assistant United States Attorney Gregory C. Melucci prosecuted this case on behalf of the government.
United States Attorney Scott W. Brady commended the Western Pennsylvania Financial Crimes Task Force (WPFCTF), for conducting the investigation that led to the successful prosecution of these defendants. The WPFCTF was established as a collaborative, multi-agency effort to effectively combat financial crimes, including identity fraud, in Western Pennsylvania. Partnering in this effort are the United States Attorney's Office for the Western District of Pennsylvania, the United States Secret Service, the United States Postal Inspection Service, the Department of Homeland Security, the Allegheny County District Attorney's Office, the Allegheny County Police Department, the City of Pittsburgh Bureau of Police and the Pennsylvania State Police.
Tampa’s Largest Ambulance Providers Agree to Pay $5.5 Million to Resolve False Claims Act Allegations Regarding Medically Unnecessary Ambulance TransportsRead the Press Release
Tampa, FL – United States Attorney Maria Chapa Lopez announces that AmeriCare Ambulance Service, Inc. and its sister company, AmeriCare ALS, Inc. (collectively, AmeriCare), have agreed to pay approximately $5.5 million to resolve allegations that they defrauded Medicare by billing for medically unnecessary ambulance transportation services.
“Fraudulently billing the government for medically unnecessary ambulance transports poses a heavy drain on the Treasury, deprives federal health care programs of valuable resources, and will not be tolerated,” said U.S. Attorney Chapa Lopez. “This lawsuit and today’s settlement evidence our office’s ongoing efforts to safeguard federal health care program beneficiaries from the effects of this type of unlawful conduct.”
According to a complaint filed by the government last year, from January 2008 through December 2016, AmeriCare submitted fraudulent claims to Medicare and TRICARE for Basic Life Support (BLS), non-emergency ambulance transports that were not medically justified. In support of these allegations, the government cited information regarding unwarranted ambulance transports it had received from numerous AmeriCare employees, as well as audits conducted by the agencies that administer Medicare and TRICARE. The government also cited damaging testimony it had elicited under oath from members of AmeriCare’s management team during the course of the investigation. This testimony, along with the other evidence obtained by the government, revealed that AmeriCare had engaged in a systemic practice – over many years – of submitting fraudulent claims to the government falsely attesting to the medical necessity of its non-emergent, BLS ambulance transports. That proof also revealed that AmeriCare had created thousands of false reports and other documentation during this time period, in a failed effort to support this illicit practice.
In addition to paying approximately $5.5 million, AmeriCare has also agreed to enter into an integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.
“Medical service providers who engage in systemic fraud at the core of their business levy an assault on federal health care programs and the American taxpayer,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services, Office of Inspector General. “In spite of often false medical documents, the OIG and our partners will not be deterred in our efforts to root out this type of fraud and protect the American public.”
"This settlement demonstrates the effectiveness of investigations by the Defense Criminal Investigative Service and our law enforcement partners to ensure that medical service providers do not bill for unnecessary services that divert and waste precious taxpayer dollars,” said Special Agent in Charge John F. Khin, Southeast Field Office. “DCIS protects the integrity of DoD programs by rooting out fraud, waste, and abuse that negatively impacts critical programs such as TRICARE."
This settlement concludes a lawsuit originally filed by a former AmeriCare employee, Ernest Sharp. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act that permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did here. Mr. Sharp will receive roughly $1.15 million of the proceeds of the settlement with AmeriCare.
This settlement illustrates the government’s emphasis on combating health care fraud and one of the most powerful tools in this effort is the False Claims Act. Tips from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800.447.8477).
The case is captioned United States, et al. ex rel. Sharp v. AmeriCare Ambulance, Case No. 8:13-cv-1171-T-33AEP. The settlement resolves the United States’ claims in that case. The claims resolved by the settlement are allegations only and there has been no determination of liability.
The settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the Middle District of Florida and the HHS-OIG and the Defense Criminal Instigative Service. It was handled by Assistant United States Attorney Christopher P. Tuite.
St. Joseph Woman Sentenced for $1.5 Million Tax Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Timothy A. Garrison, United States Attorney for the Western District of Missouri, announced that a St. Joseph, Mo., woman was sentenced in federal court today for her role in a $1.5 million tax fraud scheme as well as for individual tax fraud.
Dawn Langlais (formerly Ankrom-Brown), 60, of St. Joseph, was sentenced by U.S. District Judge Beth Phillips to 18 months in federal prison without parole.
On July 7, 2017, Langlais pleaded guilty to failing to pay over employee payroll taxes to the IRS. Her daughter, her sister, and her sister’s husband have also pleaded guilty.
Langlais helped her sister and co-defendant Dinorah Lynn Stoll-Weaver, 50, of St. Joseph, operate Homeward Bound Health Services, Inc., a home health provider located in St. Joseph, from 2001 through early 2010. Stoll-Weaver was the owner of Homeward Bound. In 2010, Homeward Bound’s name was changed to Silver Linings, Inc., and nominee owners were put in place who signed the checks but made no business decisions. Stoll-Weaver and Langlais continued to operate Silver Linings until it closed in 2013.
Homeward Bound and Silver Linings withheld and collected federal income taxes, Social Security taxes, and Medicare taxes from employees and then kept those withheld taxes instead of paying them over to the IRS. The total criminal tax loss attributed to Homeward Bound and Silver Linings for failure to pay employment taxes due and owing from 2001 to 2012 is $1,459,727.
Homeward Bound and Silver Linings also withheld from employee paychecks and kept child support payments, employee IRA contributions, and medical and dental insurance payments. The theft of these payments had negative collateral consequences for their employees.
Langlais and Stoll-Weaver admitted they received income from Homeward Bound and Silver Linings, which they failed to report on their individual federal income tax forms, and as a result, underpaid their federal income taxes. Langlais willfully failed to make an income tax return or pay personal income taxes from 2010 to 2012, for a total personal tax loss of $56,860.
Stoll-Weaver employed her husband, co-defendant Thad Weaver, 46, of St. Joseph, and Langlais employed her daughter, co-defendant Jennifer Sturgis, 39, of St. Joseph, at Homeward Bound and Silver Linings. They also employed other relatives at the business.
Stoll-Weaver also pleaded guilty to failing to pay over employee payroll taxes to the IRS. Weaver and Sturgis each pleaded guilty to making false statements on a tax return. Weaver and Sturgis admitted they received income from Homeward Bound and Silver Linings, which they failed to report on their individual federal income tax forms, and as a result, underpaid their federal income taxes.
Weaver and Stoll-Weaver were married and filed individual income tax returns for 2010 through 2012; Stoll-Weaver filed a separate return in 2009. Their combined unreported income was at least $257,827. Weaver’s total personal tax loss was at least $27,488. Stoll-Weaver’s personal tax loss was $34,264.
Sturgis willfully failed to make an income tax return or pay personal income taxes from 2007 to 2012, for a total personal tax loss of $148,347, including relevant conduct.
Additionally, from 2009 to 2012, Stoll-Weaver, Weaver and Sturgis each claimed personal federal income tax refunds, knowing that Homeward Bound and Silver Linings had not paid any income taxes to the IRS.
Weaver and Sturgis were each sentenced to five years of probation; Stoll-Weaver awaits sentencing.
This case is being prosecuted by Assistant U.S. Attorney Kathleen D. Mahoney. It was investigated by IRS – Criminal Investigation.
St. Francis Man Indicted on Assault ChargesRead the Press Release
United States Attorney Ron Parsons announced that a St. Francis, South Dakota, man has been indicted by a federal grand jury for Assault with a Dangerous Weapon.
John Matthew Brave Hawk, age 20, was indicted on January 17, 2018. He appeared before U.S. Magistrate Judge Mark A. Moreno on January 29, 2018, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 10 years in custody and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that on November 14, 2017, Brave Hawk assaulted three individuals with a vehicle, with the intent to do bodily harm.
The charges are merely an accusation and Brave Hawk is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Daniel C. Nelson is prosecuting the case.
Brave Hawk was remanded to the custody of the U.S. Marshals Service pending trial. A trial date has not been set.
Southern Meat Market Proprietor Indicted on Federal Food Stamp Fraud, Theft and Conspiracy ChargesRead the Press Release
Memphis, TN – On January 11, 2018, a federal grand jury charged one defendant with defrauding the federal Supplemental Nutrition Assistant Program ("SNAP"), formerly known as the food stamp program. United States Attorney D. Michael Dunavant announced the indictment today.
According to the indictment, from at least January 2015 through April 2017, Guy Randal Stockard, 59, a/k/a/ "Randy," owned and operated Southern Meat Market, a small retail meat market in Memphis, Tennessee. Southern Meat Market was authorized to accept federal SNAP benefits from customers as payment for eligible food items. Customers could access and redeem their benefits using Electronic Benefits Transfer ("EBT") cards.
During that same period, Stockard allegedly used Southern Meat Market to conduct fraudulent SNAP benefit transactions with an estimated total value of at least $1.2 million. To carry out the fraud, Stockard bought customers’ SNAP benefits at a discount in exchange for cash. Stockard then redeemed those SNAP benefits at their full monetary face value.
Stockard is charged with one count of conspiracy to commit SNAP benefit fraud and theft of government property, one count of SNAP benefit fraud, and one count of theft of government property.
If convicted, the defendant faces a maximum of 20 years imprisonment, a $250,00 fine and 3 years supervised release. The United States is also seeking criminal forfeiture in this case.
This case is being investigated by the United States Department of Agriculture - Office of the Inspector General and the United States Secret Service.
Assistant U.S. Attorney Murre Foster is prosecuting this case on the government’s behalf.
The charges and allegations in this indictment are merely accusations, and the defendant is innocent unless and until proven guilty.
Sioux City Man to Federal Prison for Meth ConspiracyRead the Press Release
A man who conspired with others to distribute methamphetamine was sentenced January 29, 2018, to more than seven years in federal prison.
Daniel Hodges, 35, from Sioux City, Iowa, received the prison term after a September 15, 2017, guilty plea to conspiracy to distribute methamphetamine.
At the guilty plea, Hodges admitted he was involved in a conspiracy that distributed more than a pound of methamphetamine in the Sioux City area from January 2017 through about April 29, 2017. During a traffic stop on April 29, 2017, officers seized over 90 grams of actual (pure) methamphetamine from Hodge’s person.
Hodges was sentenced in Sioux City by United States District Court Chief Leonard T. Strand. Hodges was sentenced to 90 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a 4-year term of supervised release after the prison term. There is no parole in the federal system.
Hodges is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Special Assistant United States Attorney Mikala M. Steenholdt and investigated by the Tri-State Drug Task Force consisting of officers from the Sioux City Police Department, South Sioux City Police Department, Woodbury County Sheriff’s Office, Iowa Division of Narcotics Enforcement, Drug Enforcement Administration, Iowa Criminalistics, and Bureau of Alcohol, Tobacco, Firearms and Explosives.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-4044. Follow us on Twitter @USAO_NDIA.
Silver Spring Man Sentenced to 21 Years in Prison for Production of Child PornographyRead the Press Release
FOR IMMEDIATE RELEASE Contact ELIZABETH MORSE
www.justice.gov/usao/md at (410) 209-4885
Greenbelt, Maryland – On January 29, 2018, United States District Judge George J. Hazel sentenced Demetrius Murray, age 23, of Silver Spring, Maryland to 21 years in prison, followed by a lifetime of supervised release, for Production of Child Pornography. Judge Hazel also ordered forfeiture of electronic devices seized from Murray and used by Murray to produce and store child pornography. Murray is also required to register as a sex offender.
The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Andre R. Watson of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI); and Sheriff Terry Thompson of the Weber County, Utah, Sheriff’s Office.
According to his plea agreement, Murray contacted an eleven-year-old boy in Utah, Victim A, through Xbox Live and then through a private chat on KIK, an internet-based chat service. Murray and Victim A at some point switched to Skype, an internet-based chat and video streaming service. Murray streamed pictures of himself masturbating to the boy over Skype. Victim A created a video of himself masturbating, which depicted child pornography, and sent the video to Murray as part of a text message. Murray, after receiving the video, converted it into six still-frame pictures and sent the pictures back to Victim A. Victim A’s mother learned of Murray’s interaction with her son and reported Murray’s conduct to the National Center for Missing and Exploited Children (“NCMEC”).
As a result of the NCMEC Cybertip, HSI agents and officers from the Montgomery County Police Department executed a search warrant at Murray’s home in January 2016. Agents recovered more than 600 images and more than 400 videos depicting minors, the vast majority of which depicted child pornography.
Forensic examination of Murray’s iPhone seized during the search showed that in May and June 2015, Murray had engaged in text messaging with a boy, Victim B, who lived in Alabama. Victim B told Murray that he was 14 years old. Nevertheless, Murray requested that Victim B send pictures of his body and pictures of himself masturbating. Victim B sent the requested pictures. When Murray learned that Victim B had a four-year-old relative, Victim C, Murray requested that Victim B send pictures of Victim C performing oral sex on Victim B. Victim B sent the pictures, which depicted child pornography.
Acting United States Attorney Stephen M. Schenning praised HSI, the Montgomery County Police Department, and the Weber County Utah Sheriff’s Office for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorney Joseph Baldwin, who prosecuted the case.
Shelton Man Pleads Guilty to Federal Child Pornography OffenseRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that MICHAEL HULL, 60, of Shelton, pleaded guilty today before U.S. District Judge Stefan R. Underhill in Bridgeport to one count of receipt of child pornography.
According to court documents and statements made in court, on May 31, 2017, Homeland Security Investigations (HSI) agents conducted a court-authorized search of HULL’s Shelton residence and seized approximately 16 electronic devices, including computers and external hard drives. A forensic examination of the seized devices revealed approximately 13 images and 126 videos of child pornography, including images and videos depicting children younger than 12 engaged in sexually explicit conduct.
The investigation also revealed that HULL had a video camera installed in his bathroom, which captured images of individuals, including children, who used his bathroom.
Judge Underhill scheduled sentencing for April 24, 2018, at which time HULL faces a mandatory minimum term of imprisonment of five years and a maximum term of imprisonment of 20 years.
HULL has been detained since his arrest on May 31, 2017.
This matter is being investigated by Homeland Security Investigations and the Connecticut Child Exploitation Task Force, which includes federal, state and local law enforcement agencies. The case is being prosecuted by Assistant U.S. Attorney Jacabed Rodriguez-Coss.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
To report cases of child exploitation, please visit www.cybertipline.com.
Rosebud Man Sentenced for EscapeRead the Press Release
United States Attorney Ron Parsons announced that a Rosebud, South Dakota, man convicted of Escape from Custody was sentenced on January 29, 2018, by Chief Judge Jeffrey L. Viken, U.S. District Court.
Marlow Poor Thunder, age 22, was sentenced to 12 months and 1 day of imprisonment, followed by 3 years of supervised release, and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.
Poor Thunder was charged on August 22, 2017, and pleaded guilty on October 20, 2017. The conviction stems from Poor Thunder leaving the Community Education Center, where he was serving part of a federal sentence, without permission and failing to return in August 2017.
This case was investigated by the U.S. Marshals Service. Assistant U.S. Attorney Ben Patterson prosecuted the case.
Providence Felon Detained on Ammunition ChargeRead the Press Release
PROVIDENCE, RI – Eric Valdez, 28, of Providence, was ordered detained in federal custody at his arraignment on Monday in U.S. District Court in Providence on an indictment charging him with being a felon in possession of ammunition.
The indictment, announced United States Attorney Stephen G. Dambruch; Providence Police Chief Colonel Hugh T. Clements, Jr., and Mickey Leadingham, Special Agent in Charge of the Boston Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives, was brought as a result of a Project Safe Neighborhoods investigation.
Project Safe Neighborhoods is a federal, state and local law enforcement collaboration to identify, investigate and prosecute individuals responsible for violent crimes in our neighborhoods. Project Safe Neighborhoods has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone.
According to court records, in September 2011, Eric Valdez was convicted in federal court of possession of a stolen firearm, possession of a firearm with an obliterated serial number, and resisting arrest by a federal agent. He was sentenced to 14 months imprisonment, to be followed by 3 years supervised release.
After Valdez was released from prison, in 2013 in Rhode Island state court Valdez was convicted of assault, trafficking cocaine and other offenses. He received an additional 9 months federal sentence for violating the terms of his supervised release.
According to court records and information presented to the courts, in November 2017, Valdez was in a vehicle with two other men where Providence Police located a loaded 9mm handgun. A court authorized search of Valdez’ residence executed simultaneously resulted in the seizure of two bags containing 9mm ammunition and a digital scale containing drug residue. As a result of the Project Safe Neighborhoods investigation, Valdez was arrested on a state charge of trafficking heroin by the Providence Police. He was charged by way of a federal indictment with being a felon in possession of ammunition. Valdez pleaded guilty to a lesser drug possession state charge and was sentence to 3 months to serve at the ACI. Valdez appeared for arraignment in U.S. District Court on Monday on the federal indictment and was ordered detained by U.S. District Court Magistrate Judge Patricia A. Sullivan.
An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney John P. McAdams.
The Bureau of Alcohol, Tobacco, Firearms and Explosives assisted Providence Police in the investigation of the most recent alleged incident resulting in the federal charge brought in this matter.
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Pierre Man Charged with Receipt, Distribution and Possession of Child PornographyRead the Press Release
United States Attorney Ron Parsons announced that a Pierre, South Dakota, man has been indicted by a federal grand jury for Receipt and Distribution of Images Depicting the Sexual Exploitation of Minors and Possession of Child Pornography.
David Foster, age 34, was indicted on January 17, 2018. He appeared before U.S. Magistrate Judge Mark A. Moreno on January 25, 2018, and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to 40 years in custody and/or a $500,000 fine, up to life of supervised release, and a $200 assessment to the Federal Crime Victims Fund. Restitution may also be ordered.
The Indictment alleges that between October 5, 2016, and May 4, 2017, Foster knowingly received and distributed images depicting minors involved in sexually explicit conduct. The Indictment further alleges that Foster was in possession of Child Pornography.
The charges are merely accusations and Foster is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Department of Homeland Security. Assistant U.S. Attorney Troy R. Morley is prosecuting the case.
Foster was released on bond pending trial which has been set for March 20, 2018.
Peru Man Sentenced to 30 Months ImprisonmentRead the Press Release
FORT WAYNE – The United States Attorney for the Northern District of Indiana, Thomas L. Kirsch II, announced that Jamie Buckner, age 48, of Peru Indiana, was sentenced before Chief Judge Theresa Springmann on her guilty plea to eight counts of theft of government property.
Buckner was sentenced to 30 months imprisonment and 3 years of supervised release.
According to documents in this case, from June through November 2015, Buckner stole United States Postage Stamps and other merchandise belonging to the United States Postal Services by presenting checks for the payment of stamps and merchandise knowing that the checks would not be honored by the financial institutions. As part of the sentence, Buckner was ordered to pay restitution to the Postal Service in the amount of $21,578.21.
This case was investigated by the United States Postal Inspection Service and was handled by Assistant United States Attorney Stacey R. Speith
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Oklahoma City Man Previously Sentenced to 272 Months, $37,958 Restitution for Multiple Charges Found Guilty on Additional State ChargesRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that, on December 8, 2016, JEREMY DWAYNE LAVORCHEK, age 28, of Oklahoma City, Oklahoma, was sentenced to 272 months imprisonment, and ordered to pay $37,958.33 in restitution for POSSESSION WITH INTENT TO DISTRIBUTE SCHEDULE II CONTROLLED SUBSTANCES, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C); ROBBERY INVOLVING CONTROLLED SUBSTANCES, in violation of Title 18, United States Code, Section 2118(a); and CARJACKING, in violation of Title 18, United States Code, Section 2119(1).
The charges and lengthy sentence were the result of Lavorchek’s violent armed robbery of Ernie’s Pharmacy, located in Muskogee, Oklahoma, on December 9, 2015. Lavorchek used a handgun to threaten the employees of Ernie’s Pharmacy to steal Opioid pharmaceutical drugs. In attempting to flee the scene of the pharmacy robbery, Lavorchek carjacked a woman waiting in the pharmacy drive-thru by threatening her and her 2-year-old son with a gun and forcing her to drive him from the crime scene. Lavorchek was charged in the Eastern District of Oklahoma and sentenced by United States District Judge Ronald White.On March 5, 2016, Lavorchek committed an equally violent armed robbery of the Legacy Drug Store in Pauls Valley, Oklahoma. Lavorchek and a second accomplice used handguns to tie up three employees and steal large amounts of Opioid pain medications. Police arrested Lavorchek as he fled the scene of the robbery. The Garvin County District Attorney’s Office charged Lavorchek with nine counts of robbery, assault and kidnapping.
On January 27, 2018, a State of Oklahoma jury of seven woman and five men found Lavorchek guilty on all counts and recommended a sentence of life in prison on all nine counts. Lavorchek is expected to be formally sentenced in March 2018.
United States Attorney Brian J. Kuester commented, “We are proud to have worked with District 21 District Attorney, Greg Mashburn, in coordinating the federal and state prosecutions of a dangerous serial criminal. The U. S. Attorney’s Office and the Garvin County District Attorney’s Office shared evidence and strategies in an effort to achieve the maximum sentences for Lavorchek, thereby protecting the people of Oklahoma by ensuring he would never be free to commit further violent acts. This team effort demonstrates the success that we can have when state and federal agencies work together in the common cause of protecting the public.”
New Port Richey Resident Sentenced to 10 Years in Prison in Connection with Tax Impersonation SchemeRead the Press Release
Tampa, FL – U.S. District Judge Mary S. Scriven today sentenced Andrew Corrigan (24, New Port Richey) to 10 years in federal prison for conspiring to commit extortion and money laundering. As part of his sentence, the Court also ordered restitution to the victims and entered a money judgment in the amount of $870,652, representing the proceeds of conspiracy.
Corrigan pleaded guilty on October 25, 2017.
According to court documents, Corrigan and his co-defendant, David Owen, used individuals to open bank accounts (straw account owners) into which victims of tax impersonation calls deposited money. This money was extorted from the victims by falsely representing that the victims owed federal income tax to the Internal Revenue Service (IRS), to Canadian tax authorities, or other financial obligations. As part of the scheme, victims were threatened that if they failed to pay these obligations, either they or their family members would face arrest, prosecution, or other legal consequences.
Provided with online access by the straw account owners, Corrigan and Owen monitored the victims’ deposits to ensure timely withdrawals by the straw account owners. In order to make the withdrawals at the bank, the defendants provided the straw account owners with the victims’ names, locations, and deposit amounts. Corrigan and Owen then directed the straw account owners to withdraw the funds in cash, and turn it over to them, often minus a payment to the straw account owner for opening the account or conducting the transaction. Victims were also directed to pay via money transfers and prepaid debit cards, which were collected and deposited by Corrigan and Owen.
Owen pleaded guilty on October 25, 2017. He is scheduled to be sentenced on May 1, 2018.
This case was investigated by the Internal Revenue Service – Criminal Investigation, Treasury Inspector General for Tax Administration, the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the Pinellas County Sheriff’s Office, the Pasco County Sheriff’s Office, the Largo Police Department, the Gulfport Police Department, the Toronto Police Service, and the Royal Canadian Mounted Police. It was prosecuted by Assistant United States Attorney Kelley Howard-Allen.
Monett Sex Offender Sentenced to 21 Years for Child PornographyRead the Press Release
SPRINGFIELD, Mo. – Timothy A. Garrison, United States Attorney for the Western District of Missouri, announced a convicted sex offender in Monett, Mo., was sentenced in federal court today for receiving child pornography over the Internet.
Carl Donald Greiner, 32, of Monett, was sentenced by U.S. District Judge M. Douglas Harpool to 21 years and 10 months in federal prison without parole. The court also sentenced Greiner to spend the rest of his life on supervised release following incarceration.
Greiner, who pleaded guilty on Aug. 31, 2017, was previously convicted of possessing child pornography, sexual misconduct and furnishing pornographic material to a minor in 2004. While on supervision for those offenses, Greiner, Greiner engaged in sexual intercourse with a 13-year-old female victim and was convicted of statutory rape and statutory sodomy in the first degree.
A person using Greiner’s computer reported to police officers on April 30, 2016, that she saw a large amount of child pornography on the computer located in his bedroom, including videos of children ranging in age from 4 to 17. Officers executed a search warrant at Greiner’s residence the same day and seized his desktop computer along with an address book with Internet addresses.
Investigators discovered multiple images and videos of child pornography on Greiner’s computer that had been downloaded from the Internet.
This case was prosecuted by Assistant U.S. Attorney Ami Harshad Miller. It was investigated by the Southwest Missouri Cybercrimes Task Force and the Monett, Mo., Police Department.
Project Safe Childhood
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc . For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Milford Man with Long Criminal History Sentenced to Federal Prison for Methamphetamine ConspiracyRead the Press Release
A man who conspired to distribute methamphetamine was sentenced on January 29, 2018, to 15 years in federal prison.
Justin Stephen Ries, 49, from Milford, Iowa, received the prison term after a September 15, 2017, guilty plea to one count of conspiracy to distribute methamphetamine.
At sentencing and during prior court proceedings, the government presented evidence that on June 12, 2017, law enforcement executed three search warrants and seized a total of 380.5 grams of methamphetamine, 169.76 grams of marijuana, 0.51 grams of fentanyl/heroin, two fentanyl transdermal patches, 29 unused syringes, fifteen shotgun shells, and $24,874.00 in U.S. currency from Ries. Evidence also showed that Ries accumulated 31 criminal convictions during his lifetime, including convictions for felony drug offenses, violent assaults, and driving while intoxicated.
Ries was sentenced in Sioux City by United States District Court Chief Judge Leonard T. Strand. Ries was sentenced to 180 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a 6-year term of supervised release after the prison term. There is no parole in the federal system.
Ries is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Special Assistant United States Attorney Ajay J. Alexander and investigated by the Iowa Great Lakes Drug Task Force, specifically the Clay County Sheriff’s Office, the Spencer Police Department, and the Iowa Department of Criminal Investigations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-CR-4043-LTS.
Follow us on Twitter @USAO_NDIA.
Middle District of Florida U.S. Attorney’s Office Collects More Than $700 Million in Civil and Criminal Actions for U.S. Taxpayers in Fiscal Year 2017Read the Press Release
Tampa, FL - U.S. Attorney Maria Chapa Lopez announced today that the Middle District of Florida (MDFL) collected $700,928,675 in criminal and civil actions in the fiscal year ending September 30, 2017 (FY 2017). This represents the largest aggregate recovery amount in the district’s history. Of this amount, $34,800,537.04 was collected in local civil actions and $15,469,146.50 was collected in criminal actions. The Office’s Civil Division, led by Randy Harwell, also worked jointly with other U.S. Attorney’s Offices and Department of Justice (DOJ) components in nationwide civil cases that addressed fraud schemes and illegal practices extending beyond district boundaries, recovering an additional $650,658,992.01 in these jointly handled cases.
Additionally, the Office’s Asset Forfeiture Division, led by Anita Cream, recovered $18,633,392 in asset forfeiture actions last fiscal year. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes. For instance, in FY 2017, more than $9 million forfeited in the MDFL in prior years was returned to victims of the criminal offenses upon which the forfeitures were based, and more than $6.7 million was shared with federal, state, and local law enforcement agencies.
Overall, the Justice Department collected just over $15 billion in civil and criminal actions in FY 2017.
“Working in conjunction with our federal, state, and local law enforcement partners, our collection efforts have resulted in the recovery of funds from convicted criminals and others who have violated our nation’s laws through fraud and other means,” said U.S. Attorney Chapa Lopez. “These coordinated efforts ensure that criminals and others who commit fraud are held accountable for their offenses and, wherever possible, help victims recover from their losses.”
U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, the Defense Health Agency, the Internal Revenue Service, the Small Business Administration, and the Department of Education. See below for MDFL significant civil case highlights.
FY 2017 Criminal Cases
In FY 2017, the MDFL recovered $15,469,146.50 in criminal collections, primarily restitution owed by criminal defendants. Of those funds, $6,703,417.60 was collected at or before sentencing as a result of our analysis of defendants’ ability to pay. The MDFL began aggressively pursuing prejudgment collection several years ago after recognizing that it was the most effective means of collecting criminal debt. Most defendants have a minimal ability to pay restitution following their release from prison. By notifying defendants prior to sentencing of the assets that the United States believes a defendant has available to pay restitution, we increase the likelihood that restitution will be timely paid to victims and decrease the chances that a defendant will dissipate his assets before being ordered to pay restitution at sentencing.
FY 2017 Civil Cases
Civil Healthcare Fraud
United States ex rel. Vinca v. Advanced Biohealing, Inc.,
Case no. 8:11-civ-176-T-30MAP (M.D. Fla.)
Six qui tam cases led to a nationwide investigation into the kickback practices of a manufacturer of a skin graft product used to promote healing of skin ulcers. The product has been approved by the U.S. Food and Drug Administration for wound healing below diabetic patients’ knees. The relators claimed the defendant’s sales force was systematically instructed by management to pay kickbacks to physicians in the form of meals, entertainment, and other illegal remuneration to induce the purchase of the product. U.S. Department of Veterans Affairs physicians were a particular focus of this illegal behavior. Working with three other U.S. Attorneys’ offices and the DOJ Civil Division, the MDFL Civil Division investigated these claims exhaustively all over the country and corroborated them. In January 2017, we partially intervened in all six cases and settled the kickback allegations for $350,000,000. This is the largest civil settlement in a case involving a medical device in the history of the False Claims Act, and the largest civil settlement of any kind in the history of our district. A number of executives and physicians have also pleaded guilty to health care fraud offenses in a parallel criminal case.
United States ex rel. Martin v. Life Care Centers, Inc.,
Case no. 1:08-cv-251 (M.D. Tenn.)
This case was one of two overlapping qui tam cases consolidated in the Middle District of Tennessee that alleged violations of the False Claims Act by a nationwide provider of rehabilitation therapy services. The relators alleged that the provider had upcoded its services and provided medically unnecessary rehabilitation to patients at its facilities all over the country, including in the MDFL. Our district joined a number of other United States Attorneys’ Offices to assist the Department of Justice Civil Frauds Section in the litigation that ensued after DOJ intervened in the case in 2012. After five years of litigation, we finalized a settlement of all claims against the provider and its principal, Forrest Preston, for $145,000,000.
United States ex rel. Sewall v. Freedom Health, Inc.,
Case no. 8:09-cv-1625-T-35AEP (M.D. Fla.)
A former management level employee of an affiliated company of the defendant Part C managed care plan filed this qui tam complaint in August 2009, alleging that the defendants had illegally dis-enrolled the plan’s most costly beneficiaries, and kept healthy beneficiaries enrolled, in violation of the federal regulations governing the plan. Moreover, he contended that Freedom Health had fraudulently induced the government to authorize an expansion of the plan’s service area by representing to Medicare that it had contracted with a costly network of medical providers that it had no intention of using. Finally, the defendants allegedly used fraud to manipulate risk adjustment data given to Medicare to determine the level of payments to the plan.
After pursuing an investigation into the relator’s allegations in parallel proceedings for seven years, we intervened in the qui tam case and settled the risk adjustment claims and claims associated with service area expansion for $31,695,000. An individual defendant, Sidd Pagidipati, who oversaw the plan’s service area expansion application paid an additional $750,000 to resolve personal claims against him for his role in the service area expansion allegations. This case features the largest settlement of a Medicare Advantage risk adjustment claim on record.
United States ex rel. Barnes v. 21st Century Oncology, Inc., et al.,
Case no. 2:13-civ-228-FtM-99DNF (M.D. Fla.)
A former medical assistant of a nationwide oncology provider alleged in a qui tam complaint that the defendants had fraudulently billed Medicare and TriCare for fluorescence in situ-hybridization cytology (FISH) tests used to identify genetic abnormalities too small to be seen microscopically. The relator alleged that employee physicians of the defendant systematically ordered FISH tests that were not medically necessary, and would alter medical records in order to justify ordering FISH tests. Defendant 21st Century allegedly encouraged these fraudulent practices by offering bonuses to physicians based on the number of FISH tests ordered.
In 2016, we announced settlements of our claims against 21st Century Oncology for $19.75 million and our claims against two individual physicians, Dr. Robert Scapa and Dr. David Spellberg, for $250,000 and $1.5 million, respectively. In 2017, we finalized a settlement with the last remaining individual physician in the case, Dr. Meir Daller, for $3,810,000, representing a recovery of treble damages.
Southeast Orthopedics Specialists (pre-lawsuit)
A Jacksonville orthopedics practice was investigated in response to a direct program referral, and was determined to have engaged in a number of improper billing practices that defrauded federal health programs, including the abusive use of billing modifiers, submitting claims for medically unnecessary ultrasound guided injections, and other illicit practices. The physicians’ practice agreed to settle the government’s claims through a settlement that paid $4,488,000.
United States ex rel. Gross v. Norman, Case no. 8:14-civ-978-T-33EAJ (M.D. Fla.)
A patient of a Tampa thyroid surgeon filed a qui tam lawsuit alleging that the surgeon had defrauded federal health programs through improper practices such as performing pre-operative examinations on the day before or the day of surgery procedures, and charging extra fees from federal health care beneficiaries for services for which he had already received payment from the government. Following a comprehensive investigation, we settled these civil fraud claims for $4,000,000.
Civil Mortgage Fraud
Freedom Financial Acquisitions (pre-lawsuit)
A whistleblower alerted the Department of Housing and Urban Development (HUD) to allegations that this underwriter had submitted false claims to HUD’s Federal Housing Administration (FHA) insurance program by failing to meet regulatory requirements in connection with its participation in a federally insured Home Equity Conversion Mortgages (HECM) or “reverse mortgage” program. Specifically, the defendant had failed to obtain appraisals within 30 days of reverse mortgage loans becoming due and payable, and failed to pursue foreclosure in a manner consistent with HUD regulations. Witness interviews and document review revealed other defects in Freedom Financial’s servicing of these loans, including failure to notify HUD that it was pursuing foreclosure in a timely fashion, failure to employ reasonable diligence in servicing a HECM loan after it had become due and payable, and failure to submit HECM insurance claims in a timely fashion. Freedom Financial ultimately agreed to settle claims under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and the False Claims Act arising from these shortcomings for $89,274,944, which included credit for a voluntary disclosure that the defendant had earlier made to the FHA program in the amount of $21,000,000.
Olympus Zarris (pre-lawsuit)
The reverse mortgage practices of a Tarpon Springs condominium developer, Olympus Zarris, were investigated and were found to have violated the requirements of HUD’s regulations that govern the agency’s reverse mortgage lending program. Zarris was found to have engaged in fraudulent sales practices wherein he concealed the amounts paid to the buyers in order to artificially inflate the appraised values of condominium complex units. He recruited elderly buyers to purchase units at the inflated values and required them to immediately apply for reverse mortgages in the maximum amount possible. Zarris and his associates assisted the elderly buyers in applying for reverse mortgages, including filling out their loan applications. The proceeds of the reverse mortgages obtained through these misleading applications were then wired to a company Zarris owned at the reverse mortgage closing. Zarris agreed to resolve the government’s claims under the False Claims Act through a settlement that paid $475,000.
Civil Penalties
McKesson (pre-lawsuit)
This was a coordinated, multi-district investigation by twelve United States Attorneys’ Offices into the conduct of one of the largest distributors of class II narcotics in the country. The Drug Enforcement Administration (DEA) referred the matter for pursuit of civil penalties under the Controlled Substances Act, alleging that McKesson had failed to report suspicious orders of opiate medications at a number of its distribution centers. The Florida investigation centered upon the defendant’s activities at its Lakeland distribution center, which was found to have failed to report suspicious orders of hydromorphone to at least two Florida pharmacies. The government presented its findings concerning the nationwide conduct to McKesson, and ultimately negotiated a settlement that paid $150,000,000 in civil penalties and that will suspend McKesson’s DEA registrations for a period of two years at a number of its distribution centers. In a landmark feature of the settlement, McKesson also agreed to independent oversight of its suspicious orders reporting program by a third-party monitor.
Cardinal Health (pre-lawsuit)
The DEA referred a civil penalty case against a major distributor of Class II narcotics, Cardinal Health, over its failure to report suspicious orders of opiate medications made by pharmacies in the central Florida area. The conduct, which was rampant during the time period running from 2009 to May 2012, gave rise to exposure to civil penalties under the Controlled Substances Act. The District of Maryland joined forces with the effort to address Cardinal Health’s failure to report suspicious orders of a similar nature in the Baltimore area, and the Southern District of New York opened an investigation into the failure by a Cardinal subsidiary, Kinray, to maintain sufficient controls over deliveries of Class II narcotics in the Manhattan area.
After several years of investigation, we negotiated an agreement to settle the Florida and Maryland claims for $34,000,000. The Southern District of New York settled claims against the Kinray subsidiary for an additional $10,000,000.
FY 2017 Asset Forfeiture Cases
United States v. Davanzo et al.
Case no. 2:15-cr-141-FtM-38MRM (M.D. Fla.)
Defendants Thomas Davanzo and Robert Fedyna pleaded guilty to wire fraud and money laundering conspiracies arising out of a scheme that took advantage of regulations implemented by the EPA that were intended to induce traditional petroleum producers to use renewable fuels in their products by requiring producers to purchase “Renewable Identification Numbers” from renewable fuel producers. In October 2016, the Court entered Forfeiture Money Judgments against them in the amount of $46,360,724.50. The Court also entered preliminary orders of forfeiture for assets they had purchased with proceeds from the scheme. Collectively, this included the forfeiture of 27 bank accounts, a 43-foot Motor Yacht, 4 high end vehicles, 4 thoroughbred horses, 2 pieces of real property, gold coins, jewelry, and cash. Final Orders of Forfeiture were entered for these assets in February and March 2017. To date, we have liquidated/collected approximately $4,315,991.63 as a result of these forfeitures. Some of the assets are still for sale.
United States v. Idhedoise et al.
Case no. 8:15-cr-320-T-23TGW (M.D. Fla.)
Priscilla Ellis, Perry Cortese, and Kenietta Johnson were involved in a sophisticated fraud and money laundering network that preyed on victims throughout the world. They helped members of that network defraud victims across the United States and then laundered the funds, transferring much of it overseas.
In August 2015, we obtained seizure warrants to seize numerous bank accounts involved in the scheme. Ellis, Cortese, and Johnson were indicted in September 2015 and proceeded to trial in October 2016. All three defendants were ultimately convicted of conspiracy to commit mail and wire fraud and conspiracy to commit money laundering. Following briefing and a hearing, the Court entered forfeiture money judgments against the defendants in the amount of $9,288,241.36 and preliminary orders of forfeiture forfeiting jewelry, 14 bank accounts, 3 Mercedes-Benz vehicles, and 4 pieces of real property to the United States. The net proceeds obtained from the sale of the forfeited assets will be applied to the forfeiture money judgment. The MDFL intends to seek authorization from DOJ to use the forfeited funds to pay victims.
United States v. Pinon et al.
Case no. 5:14-cr-41-Oc-10PRL (M.D. Fla.)
Rolando Pinon and his codefendants were prosecuted for their participation in a cocaine trafficking conspiracy that lasted more than seven years and involved the distribution of well over 50 kilograms of cocaine. Pinon, the lead defendant, was a resident of San Benito, Texas, who regularly distributed cocaine to Swoll, an Ocala resident. As part of his sentence, the Court forfeited four pieces of real property, and $84,000 cash in lieu of another property from Pinon in FY 2017, for a total forfeiture amount of $752,000 (with the additional $130,500 in vehicles sold in FY 2016).
Maryland Man Sentenced to 102 Months in Prison for His Role in Drug Trafficking OrganizationRead the Press Release
WASHINGTON - Bradley Cobbler, 35, of Hyattsville, Md., has been sentenced to 102 months in prison on a federal drug conspiracy charge stemming from his role in a drug trafficking ring that sold cocaine, marijuana, and other narcotics in the Washington, D.C. area.
The announcement was made today by U.S. Attorney Jessie K. Liu, Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, Andre R. Watson, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Baltimore, and Peter Newsham, Chief of the Metropolitan Police Department (MPD).
Cobbler pled guilty in March 2017 to one count of conspiracy to distribute and possession with intent to distribute cocaine and marijuana. He was sentenced on Jan. 29, 2018, by the Honorable Amit P. Mehta. Following his prison term, Cobbler will be placed on five years of supervised release.
According to the government’s evidence, Cobbler and others participated in a conspiracy to distribute large amounts of narcotics between 2009 and 2014. This case represented the end result of a more than three-year investigation into illegal drug distribution and other criminal activity which, in various capacities, involved or occurred in the District of Columbia and the States of Maryland, California, and Virginia. This drug trafficking group mainly involved itself with trafficking very large quantities of marijuana, but also involved itself with redistributing various and significant quantities of heroin and cocaine hydrochloride (powder cocaine). In that regard, during the conspiracy, California suppliers frequently sent – or conspired to send – large quantities of marijuana, heroin, or cocaine to the Washington, D.C., metropolitan area, where the defendant and others participated in the illegal redistribution of one or more of the controlled substances to others in the Washington, D.C., area for profit.
Beginning sometime in 2011 and continuing until August 2014, Cobbler had an agreement to distribute and possess with the intent to distribute cocaine and marijuana, and other narcotics, with various individuals in the Washington, D.C., metropolitan area, specifically including the District of Columbia and Prince George’s County, Md.
Cobbler acknowledged that he and another co-defendant initially started pooling their money together to purchase marijuana from a California supplier and they traveled together on some occasions to California to facilitate drug deals. Cobbler also admitted that he gave quantities of narcotics to co-conspirator during 2014 for the purposes of redistribution to others. Other co-defendants then sold these narcotics.
Cobbler was arrested on April 7, 2016 and has been in custody ever since. Several others previously pled guilty to charges in the investigation.
In announcing the sentence, U.S. Attorney Liu, Assistant Director in Charge Vale, Special Agent in Charge Watson, and Chief Newsham praised the work of the FBI Safe Streets Gang Task Force, which in this case involved work from the FBI, the Metropolitan Police Department, and HSI. They also expressed appreciation for the assistance provided by the Prince George’s County, Md. Police Department. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Jeannette Litz and Teesha Tobias. Finally, they commended the work of Assistant U.S. Attorneys Kenneth F. Whitted, Andrea G. Duvall, and Emory V. Cole, who indicted and prosecuted the case.